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I would say yes, given the global financial crisis (GFC) in the Australian vernacular was an “easy come – easy go” experience where we experienced just the one quarter of negative growth. If you remain somewhat confused as to where the property markets are headed, don’t be.  It appears that everyone else is too. International Monetary Fund sounds warning on property bubble in Asia – Pacific and it was reported that Australia is not immune from a potential property bubble. The report said “in Australia, a combination of rapid interest rate cuts and the extension of the first – home buyers grant ensured that property remained robust during the worst of the financial crisis. Most recently, there has been a 13 per cent jump in median home prices to the end of February.” Then “the IMF report comes amid evidence the resilience in house prices has caught the eye of the Reserve Bank (RBA) Minutes of the Reserve board’s April meeting, when it announced the fifth rate rise since October, showed members noticed the property market’s continued buoyancy despite new home loans falling”. Evident with Sydney auction clearance rates graph courtesy of Australian Property Monitors.

RBA eyes May rate rise which I believe is odds – on, having read the minutes of its April 6 board meeting where they will move the official cash rate from 4.25 per cent to 4.50 per cent. Home truths on the whys and wherefores of the property market which identifies the property conundrum: housing is the biggest market in Australia – yet there is no central database that records transactions and prices. “Housing markets in the United States and Britain lost 40 per cent of value from their 2007 peaks and are only tentatively recovering, that Australian market appears only to have dipped slightly in 2008 (the pain was contained to the top end) before shooting up in the past 12 months.” Now the biggest clue “banks have changed their attitude. Where they used to push 100 per cent loan – to – valuation ratios (LVRs) now they lend 80 per cent over the value of the asset before demanding a swag of fees (usually labelled lenders’ mortgage insurance).”

BUY PRINT
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I love challenging Tim, who called me this week and asked “what shot do we need?” I responded, “The Emperor (Kevin Rudd) got his Health Reform approved so we need a smiley face. Can you shoot Luna Park, Ripples restaurant, North Sydney swimming pool, and a ferry at Luna Park wharf?” The man is pure genius! Tim again, exceeded our expectations – his shots make for great Christmas cards too.

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Macquarie’s Robertson sees easing in house price gains where with his latest note to clients Mr Robertson said “anyone with their eyes open is aware that usually low funding costs over the past 12 – 18 months powered a good part of the double digit house – price gains that have excited so much comment and talk of “bubbles”. Economists baffled by robust property market given after five interest rate increases in seven months they wonder how auction clearance rates remained so high for so long, along with rising median house prices. “It’s a bit of a puzzle,” said Macquarie Bank’s senior economist, Brian Redican, who once worked at the Reserve Bank. “You wonder how auction clearance rates remain very high along with house prices themselves.” Which takes me to the real estate ring of confidence – remember Aussies would bet on two flies climbing a wall.

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Prestige home market lies becalmed, Median prices up in Sydney – but not as much as in Melbourne and Penthouse sales hit bargain basement had Sydney Morning Herald property editor Jonathan Chancellor a very busy journalist this week. “Sydney’s $5 million plus prestige residential market has stalled. The number of sales this year sits at slightly above the low levels recorded during the trough of the global financial crisis. There have been 45 sales higher than $5 million during the first quarter of the year, a small rise on the 44 sales in the March quarter last year. Volumes are well down on the 74 sales in the 2007 March quarter, and 63 in the 2008 March quarter.” Richardson & Wrench Mosman & Neutral Bay (RWM) recorded 5 of the recorded 63 sales. Subscriber sales jumped to $942,854,220 this week.

Australians’ insatiable appetite will continue although it must be noted that home loans, power and now gas – the family budget squeeze is on given NSW families will have to find an extra $3,000 in their annual budgets by the middle of next year as the soaring cost of living consumes an additional three weeks of the average worker’s wage. Even though land prices are growing at their fastest rate since 2004. No data: foreign buyer property puzzle which by coincidence identifies a twelve month anniversary since The Emperor abolished the acquisition by foreigners of Australian real estate. At 6:38 pm on April 21 I received this notice REA as well as a increased number of emails from Russian buyers agents looking to acquire residential properties.

Foreign men of property move in which demands an answer as to exactly why The Emperor approved this policy change – without consultation. Given home – ownership dream dims for Gen – Y where NSW ‘s dire housing shortage has been exposed by figures revealing that the State needs an extra 120 homes every week to keep up with population growth. To make matters worse, the average rental  of a Sydney house  is approximately $110 more a week than it was five years ago. So Fort Fumble wastes billions on pink batts and the building education revolution – and now it is taking on health? Back to Luna Park and that “Big Dipper” which resonates with Kevin 07. Although not alone – NSW still nation’s basket case, say analysts – the NSW economy continues to be the worst  in the nation and  analysts say, the government must urgently introduce initiatives to stimulate growth in housing construction, business investment and jobs.

As quick as a flash, The Emperor hightailed it to Tasmania rifts open in Kevin Rudd’s health plan given the rethink on insulation scheme over safety fears which then transformed into a junior minister Greg Combet announcing troubled insulation grants get the chop resulting in another taxpayer initiative $2.450 billion down the gurgler. Interesting that The Emperor was all over the stage announcing this – then hides when it is cancelled.

Bob Hawke and John Howard debate our future where the combined consensus was to remove states/territories from all forms of government.

Congratulations to Jacqui and Mike Rowland – Smith who this week delivered a brother for young Will – mother and baby are both healthy and happy.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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23.04.10Robert Simeon1 Comment »

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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.

Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”

Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.

www.timmooneyphotography.com

Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”

“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.

Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

• “The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”

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Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.

RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.

The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).

Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)

Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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4.12.09Robert Simeon1 Comment »

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The Emperor (Kevin Rudd) flew in this week with his economic warriors fresh from the Gala – Yours ‘n Plenty Spend To No End festivities, where our very own MasterChef of economic stardom was quick to see how production of his “Bronzed Aussie” school plaques were progressing. Almost immediately, The Emperor and his trusted Treasurer Wayne (“Sum Ting Wong”) Swan, were perplexed! This nearly resulted in the spilling of their traditional Chinese herbal tea (daily ceremony) when the Opening Statement to Senate Economics Reference Committee by Glenn Stevens was read then (later) explained to them.

First to spruik the findings of this report was Financial Services Minister Chris “Noh Nut Hing” Bowen who must have thought all of his Chinese fortune cookies (better known as Treasury forecasts) had come at once. Breathing fire, much like his favourite red silk Chinese dragon pyjamas, Noh Nut Hing declared “Glenn Stevens today gave a very good endorsement of the government’s actions so far.”

Sadly for Fort Fumble (Federal government) it was a peek –in and duck opening statement when it was revealed that very little had to do with Fort Fumble’s economic cooking techniques – the oil in the prized Fort Fumble economic wok was spitting and burning without the usual high – five spice powder. Puff, the magic economic dragon, was tempered with the consequences of economic chop suey – (lawyers on hold) much like each edition of Virtual Realty News.

Tim Mooney Photography

www.timmooneyphotography.com

So off to the opening statement we go. Glenn Stevens “By the standards of past recessions, however, this was a mild downturn. Although the evidence is as yet incomplete, this episode has been much less serious than those in the mid 1970’s, the early 1990’s.” What, no mention of the Great Depression? Fort Fumble revealed this week that the final outcome for the 2008-09 year was a deficit of $27.1 billion – a $5 billion improvement on the fortune cookie (Treasury) predictions of $32.9 billion.

Head economic waiter of Yum Cha proceedings Wayne “Sum Ting Wong” Swan, announced from his economic kitchen “the stronger than expected final budget outcome does not substantially diminish the fiscal challenge imposed on the Australia by the global recession, which has resulted in the largest fall in budget revenues compared with its comparable budget year forecast since 1930-31.” Obviously Sum Ting Wong was acknowledging a point that the Reserve Bank governor missed?

Glenn Stevens “So I think that it is reasonable to conclude, against the benchmarks of historical and international experience, that Australia has done quite well on this occasion.”(No mention of stimulus.)

“Why was that so?” (A Cadbury chocolate moment?)

“First, our financial system was in better shape to begin with, being relatively free of serious problems the Americans, British and Europeans have encountered. “ Umm would that allude to the collapse of HIH when the then government introduced prudential authorities? Obviously a coincidence, learned consumers of fine economic dining may think!

“China will easily achieve her 8 per cent growth target this year, led by domestic demand.” No doubt The Emperor arranged for his school plaques to be made in China.

Last but not leek, “The Commonwealth budget was in surplus and there was no debt, which meant expansionary fiscal policy measures could be afforded.” Past Prime Minister John Howard was last seen doing the cha-cha on his daily morning Kirribilli walk and was observed looking at one particular signboard.

Last Saturday, 682 Sydney properties were offered to the market – eclipsing the previous record of 571 homes and apartments set back in March 2007. Many suggest that this is a direct result of the first – home buyer’s grant which was halved this week. From October 1, the First Home Buyers Boost was reduced to $10,500 for existing homes and $14,000 for new homes – both subsidies will be scaled back to $7,000 next year. What happens to property prices at the lower end is anyone’s guess although increases in interest rates must be factored in. Already there are strong suggestions that we will see the Reserve Bank of Australia (RBA) increase the cash rate in November and again in December. This is self explanatory when you look at the following graphs which provide a compelling reason as to why lower income households will definitely be vulnerable. Given it is a long weekend, here is the RBA Housing Market Developments Report (an interesting report).

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Quite amazing! We are presently experiencing record immigration growth and a major concern is that building approvals fell 0.1 per cent in August according to Australian Bureau of Statistics (ABS) figures. Maybe a clue for the Henry Tax Retort (oops I meant Report). The RBA estimates that the underlying demand for new houses annually, is around 180,000 to 200,000 and we are not even close to meeting these consumer demands which explains the current housing patterns.

It is a very hard market to predict given the above data which identified national property values climbing by 2 per cent in August which is the highest monthly increase since RP Data – Rismark Home Value Indices began in January 2005.

Mosman is a much easier market to predict given that house volumes are at record lows and I’m not reading tea leaves either.

Richardson & Wrench Mosman & Neutral Bay was again awarded the number one sales agency in the Richardson & Wrench network last Saturday night. A fantastic team effort and special thanks to the nights major sponsor the REA Group.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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2.10.09Robert Simeon12 Comments »

The 2008 residential property market will be very interesting, with property voyeurs divided in their opinions. Our opinion is that it will be the most intriguing property market that has no beginning and for that matter, no end. For all intents and purposes, markets will (predominantly) be defined by the moment, given recent global events beyond our control. Whilst the Mosman market will in no shape or form mirror the recent events of the shock market, it is clear that our superannuation market (the fourth largest on the planet) is quite sensitive in light of recent events. This was evidenced when the shock market demonstrated its worst losing streak in 26 years. Continue reading »

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1.02.08Robert SimeonNo Comments »